The competitive advantage of your company rests on its intellectual property (IP), but understanding the intricacies of IP law, particularly in international jurisdictions, can be a challenge.
When growing your workforce or recruiting in Lithuania, it is crucial to safeguard your company's innovations, designs, brand identities, creative works, copyrights, and confidential information from unauthorized use or exploitation by third parties. However, protecting your intellectual property rights in Lithuania can be a complex exercise, as they are governed by both Lithuanian legislation and European Union (EU) directives. Failing to properly secure your company's IP rights and ownership may result in expensive legal conflicts, a decline in market presence, and potential harm to your brand image.
Our primer offers valuable insights on protecting your company's IP. Please note that while our guide aims to provide information, it isn’t intended to provide legal advice. Always consult a reputable law firm.
1. NDAs are enforceable in Lithuania
Non-disclosure agreements (NDAs) are valid legal agreements in Lithuania. However, It is vital to ensure that NDAs are properly drafted to provide the necessary level of protection. There are certain considerations to keep in mind:
- NDAs must adhere to legal standards by being specific, reasonable, and not contrary to the public interest.
- Some types of information cannot be subject to an NDA. For instance, a company cannot enforce an NDA to prevent employees from reporting criminal activities committed by the company.
2. But NDAs aren’t enough to govern your ongoing relationships with employees and contractors
An NDA is a good place to start. It covers:
- How your firm's IP, information, and assets are to be used,
- Who has access, and
- How long they have access.
You should note that the purpose of an NDA is not to regulate an ongoing contractor or employment agreement with someone involved in the creation and development of your company's IP (patents, copyright, designs, etc). NDAs protect existing IP and protected information when a worker (contractor or employee) is hired. NDAs don't cover IP and protected information the employee or contractor helps create during their employment or contract. In such cases, an IP assignment agreement is required.
Most countries have their own versions of these contracts with different legal requirements. If executed correctly, IP assignment agreements are legally binding contracts that also protect confidentiality. Note that errors may cause the agreement to be declared invalid. Unsure if you’re categorizing your workers correctly? Avoid misclassification with our essential guide.
3. IP assignment agreements are enforceable
Yes, intellectual property can be assigned or transferred and such agreements are legal and enforceable in Lithuania. The ownership of IP is covered by a mix of regulations and treaties.
IP is broken down into two areas: industrial property (patents, designs, and trademarks) and copyright (rights owned by writers and artists and the protection of works of literature, artistic works, music, TV shows, software, databases, advertising, and multimedia).
Industrial design is regulated by the State Patent Bureau and the Ministry of Culture oversees copyright protection. Lithuania is also a member of the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO, Paris Convention), and the European Patent Organization (EPO).
While IP assignment agreements are enforceable in Lithuania, some types of IP can affect the implementation/requirements of an assignment agreement.
- In Lithuania, the author is granted moral rights (for example, the right to be identified as the author and the right to protect the integrity of the work) and economic rights (financial benefits). Moral rights cannot be assigned or transferred, while economic rights can, even to a third party.
- If the work was created under an employment contract, the employer is considered the first owner of economic rights.
- The transfer of an author’s economic rights must be in writing for it to be legally binding.
- The transfer of rights must include all relevant details and conditions of termination.
For patent protection and industrial designs:
Patents provide legal protection for an invention, granting exclusive rights to either the creator or their employer. The duration of the protection period is 20 years.
- The patent can be filed by either party.
- The right to patent is determined by the employment (or stand-alone) contact between the employer and the worker.
- The inventor is entitled to remuneration for the use of the design. This must be included in a contract.
4. Contractors own the copyright to their work unless you override this in a written agreement
In Lithuania, when a contractor creates a work, the author retains the economic rights unless there is a specific agreement that transfers these rights. Economic rights pertain to the financial benefits gained from using the work. It is important that the contract is in writing and clearly outlines the intended usage of the work.
5. You have to localize IP ownership clauses to Lithuania
Lithuanian and EU intellectual property laws differ from those in other countries, including the US. Lithuania doesn't utilize the "work for hire" concept common in the US. In most cases, IP created in Lithuania is owned by the creator—unless there is a binding agreement assigning those rights. One important exception relates to works created during employment. In this case, the employer is recognized as the first owner for five years. Trademarks, designs, and patents need protection specific to Lithuania and the European Union.
6. Unlike in some countries, the moral rights of an author cannot be transferred or waived
In Lithuania, creators of works are granted moral rights, which include the right to preserve the integrity of their work and be acknowledged as its author. Moral rights cannot be transferred.
Frequently asked questions about IP law in Lithuania
Who owns IP in Lithuania: employee or employer?
In most cases, the employer owns the rights to IP created by an employee. In the case of copyright, economic rights (financial benefits) are transferred to the employer. This is usually for five years or as stipulated in a legal agreement. Moral rights (the right to be identified as the author and the right to protect the integrity of the work) remain with the creator. Computer programs created by an employee or contractor are owned by the employer.
What is a CIIA agreement?
CIIA denotes a Confidential Information and Invention Assignment. This is just another name for a Proprietary Information and Inventions Assignment (PIIA). Some other names this type of agreement may go by include:
- Employee Confidentiality and Inventions Assignment Agreement
- Proprietary Information Agreement
- Employee Intellectual Property Assignment Agreement
- Protection of Company Interests Agreement
What is a PIIA agreement?
A Proprietary Information and Inventions Assignment Agreement (PIIA) is a legally binding contract that sets out the ownership and protection of intellectual property created by an employee or contractor during their work engagement with a company.
Are PIIAs and NDAs the same thing?
No. NDAs generally apply to IP and protected assets that already exist at the time the contract is signed.
In some jurisdictions, a Proprietary Information and Inventions Assignment Agreement (PIIA) applies to IP and protected assets the employee or contractor creates during their employment or work arrangement. An IP assignment agreement is used.
What is an IP assignment agreement?
An IP assignment agreement is a legal contract that establishes the ownership of intellectual property. It is used to transfer ownership of IP (copyrights, trademarks, and trade secrets) to another party. An IP agreement ensures that when an employee contributes to the development and creation of IP on behalf of a company, the company can maintain ownership rights. In Lithuania, intellectual property can be transferred through assignment or license agreements, inheritance, and other legal means. Lithuania follows European intellectual property protection regulations.
Which Lithuanian and EU agencies deal with IP?
These are some of the agencies that oversee IP in Lithuania:
- State Patent Bureau of the Republic of Lithuania (VPB): Patent law and trademark law. Located in Vilnius.
- The European Patent Office: For applying for patents across multiple EU member states. Headquartered in Munich, Germany.
- Association LATGA: Administers the rights of copyright holders in Lithuania. Located in Vilnius.
- Ministry of Culture of the Republic of Lithuania: Responsible for copyright policy and legislation. Located in Vilnius.
- European Union Intellectual Property Office (EUIPO): For EU-wide trademark protection. Located in Alicante, Spain.
Are IP regulations in Lithuania the same as in the US?
No. US patent and trademark registrations will not protect your IP rights in Lithuania or the European Union. Not only that, IP is protected differently in Lithuania. So, if you’re hiring employees or contractors in Lithuania, you need to protect your IP assets under Lithuanian law. Some US-copyrighted works may be protected in Lithuania by international copyright agreements.
Can I protect my trademark in Lithuania?
Yes. You can register your trademark at the State Patent Bureau of the Republic of Lithuania (VPB) or, if you’re seeking EU-wide protection, you can apply at the European Union Intellectual Property Office (EUIPO).
It can take 6-8 months to verify a trademark and approve the application. This time frame includes a three-month period allowing other parties to challenge the registration. Lithuanian trademark registration is valid for 10 years and may be renewed in 10-year periods with no limitation.
Lithuania is a member of the Madrid Union, which extends international trademark registrations via the Madrid Protocol.
What are the differences between an invention and a utility model?
An invention is new, innovative, and offers a new way of accomplishing a task. A patent grants the right to protect an invention to either the inventor or a delegate that holds the rights to the invention. To obtain a patent, an application must be filed that discloses the invention’s technical information.
In many countries, a utility model (also known as a minor invention) provides protection for improvements, amendments, or adaptations of existing products. Utility models are generally used for advancements in mechanical technology. The principles governing the right to protection for a utility model are comparable to those for an invention.
However, there is no utility model protection in Lithuania.
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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.